Private Sector Momentum Drives India’s R&D Spending Beyond 0.8% of GDP
Nations's research expenditure hit a 12-year high of 0.83% of GDP, marking a significant structural pivot. For the first time, private industry contributions have overtaken government funding in the national R&D mix.
Private Investment Overtakes Government Research Outlay
India’s research and development sector has reached a fiscal turning point. For the first time in the country's modern history, private industry has surfaced as the primary driver of innovation funding, surpassing the combined contributions of central and state governments. By the 2023-24 period, businesses accounted for 51.8% of the national research expenditure. This follows a sharp trajectory from 2021-22, when the private sector's share climbed to 45.5%, up from just 36.4% during the pandemic-impacted 2020-21 fiscal year.
Total Gross Expenditure on Research and Development (GERD) witnessed a significant jump from ₹1.27 lakh crore in 2020-21 to ₹1.95 lakh crore in 2021-22. This 53% surge continued upward, reaching ₹2.13 lakh crore in 2022-23 and ₹2.45 lakh crore in 2023-24. In absolute currency terms, private industry's financial commitment nearly tripled in six years, rising from ₹43,800 crore in 2017-18 to ₹126,800 crore by 2023-24.
Breaking a Decade of Stagnation
Newly released data from the Department of Science and Technology (DST), presented in a Lok Sabha response on July 29, 2026, shows that R&D spending as a percentage of GDP reached 0.83% in 2021-22. This figure represents the first time India has breached the 0.8% mark since 2009-10. Prior to this recovery, the nation's research intensity had seen a steady decline, hitting a low of 0.64% in 2020-21.
Comparative Global Standing and Statistical Shifts
Despite this progress, India’s R&D intensity remains lower than other major economies. Comparative data illustrates the gap:
- South Korea: 4.8%
- United States: 3.5%
- Japan: 3.3%
- China: 2.4%
- Israel: ~5.0%
The revised figures originate from the National Science and Technology Management Information System (NSTMIS), which expanded its scope in the 2022-23 survey to include multinational corporations and entities previously excluded from the Department of Scientific and Industrial Research (DSIR) recognition scheme. As of December 2022, India maintained 2,397 DSIR-recognized in-house R&D centers. While public science agencies like ISRO and the Department of Atomic Energy saw only incremental budget gains, the broader inclusion of corporate data reveals a more robust privatized innovation ecosystem than previously recorded.
Source: The Hindu — Economy
